The major US coal producer ended 2009 with a $US988.8 million cash position, while commodities trader Noble ended with $937 million.

But Noble also has up to $1.8 billion available from its committed banking facilities, while Peabody needs to arrange more financing for its move on Macarthur.

With Peabody revising its offer and upping it $A1 to $14 per share yesterday, Macarthur announced that “confirmation of transaction financing” was still required.

As the Macarthur transaction clocks up to $3.56 billion at $14 per share – and excluding the likelihood Peabody will have to increase its offer as Macarthur shares rally on the prospect of a takeover battle – Harrington estimated Peabody would need another $2.5 billion in debt financing, which it perhaps does not have on tap.

“So their pockets aren’t bottomless even though they may be deep,” he said.

Nevertheless, Harrington is expecting more money to come to the table and said Peabody would gain more metallurgical coal export exposure through acquiring Macarthur.

Noble is already hostile to Peabody’s offer and stated it would like the “Americans to go back home” yesterday.

This morning Noble went further, insisting Peabody was trying to get a great coal operation with its rapidly depreciating dollars.

The Hong Kong-based company gained an 87.8% stake in Gloucester Coal in a $7 per share cash takeover last year, eventually outbidding a rival Gloucester and Whitehaven Coal merger proposal.

Importantly, Macarthur currently has a takeover offer for Gloucester on the table, with scrip and cash options.

An independent expert’s report of the deal established a minimum base case of Noble earning a 20.7% stake in the new Macarthur entity, while the maximum case had Noble gaining a 24.6% stake.

Back in January, Macquarie Research analysts forecast Noble would eventually launch a full takeover play for Macarthur.

Peabody, on the other hand, is still seeking the Gloucester takeover to not proceed under its revised Macarthur offer, while it is also asking for “typical deal protection and exclusivity arrangements”, without revealing what they are.

Macarthur remains committed to seeking shareholder approval on April 12 for its takeover of Gloucester. This morning its board unsurprisingly determined Peabody’s revised bid was not an adequate premium for the company.

Should the takeover proceed, Macarthur will control Gloucester’s operating Coppabella and Moorvale mines in Queensland’s Bowen Basin along with the Stratford and Duralie mines in the Gloucester Basin of New South Wales.

Macarthur also seeks to gain Noble’s stake in the Middlemount Coal joint venture under the Gloucester offer, with the Queensland company intending to kick off the stage 2 expansion of the mine in mid-2011.

Production capacity at the coking and pulverised coal injection coal mine is expected to double to 3.6 million tonnes per annum for the first year before reaching 5.4Mtpa for the next 19 years.

Macarthur’s run-of-mine production reached 5.79Mt in 2009 from its Coppabella and Moorvale mines, while Gloucester’s total ROM production was 1.51Mt.

Peabody is a major Queensland coal producer with five operations in the state – the North Goonyella longwall mine and the Burton, Eaglefield, Millennium and Wilkie Creek open cut mines.

The company recently applied for federal government environmental approval of an expansion to Wilkie Creek in the Surat Basin, to lift raw thermal coal production capacity from 2.3Mtpa to 10Mtpa.

Peabody has majority interests in more than 30 US mines.

Shares in Macarthur closed up 1.53% to $15.10 yesterday after it came out of a trading halt, and is up 25% since closing at $12.09 on March 30.

But profit-taking kicked in this morning with the shares down 2.6% to $14.70 so far.